Hiding places, definitely. Certain plants are also good homes for microscopic animals that are eaten by fry.
As for the plants converting the nitrates into food, that's true, but it won't put a dent in the amount of nitrates you have. You'd need a heck of a lot of plants in your tank to stabilize the ecosystem, so I wouldn't rely on them for that.
They also make good sources of food, but you're not looking for that, now are you (esp. since the fish that are best at eating them are too big for your tanks).